Who said tax is boring?

Crime and Punishment

The German answer to British schadenfreude

Of all the words that have made it across the much-trampled terrain of Western Europe and the inhospitable waters of the Channel into the welcoming arms of the English language, one of the most improbable must be “Schadenfreude”. Adopted into the language after the defeat of Germany in the First World War and the imposition of punitive reparations, it was appropriate that the expression of malicious joy in the misfortune of others should be in a tongue the bastards about whose misfortune the Brits were most maliciously joyful could freely understand – the bayonetting of the wounded, so to speak.

I believe that we all have bouts of Schadenfreude from time to time. For the last few years the Germans have been positively unbearable over the plight of the Southern Europeans. I admit that the first section I instinctively turn to on receipt of my monthly English accountancy magazine is “Disciplinary Hearings” – one day they will get the fish-faced obese manager who insisted on me making his morning coffee at the outset of my career.

There was no joy whatsoever in following the climax of the Magnitsky case in Russia last week . Despite the fact that this was a Tax Attorney convicted of major tax fraud – the sort of thing that brings our profession into disrepute (ho, ho) – there were a few mitigating circumstances.

Firstly, there but for the grace of Tsar Nicholas go I. Had George V’s doppelgänger not “encouraged” my grandparents to move residence to his cousin’s green and pleasant land in 1905 , I suppose I could have been in this fellow’s position.

Enough material for a book

Secondly, Sergei Magnitsky – along with his co-defendant William F Browder, an American/British Fund Manager and financier – was almost definitely innocent of all charges concerning the fraudulent claiming of tax benefits for the employment of disabled persons . The two gentlemen had uncovered a massive tax fraud by government officials and decided to blow the lid on it. This was a bit like standing in a forest trying to explain to an eight foot high grizzly bear, in perfect Russian, that you had clipped its cub’s earhole because it had rudely said “Boo” to you. Not a sensible time to renew ones monthly bus pass.

But the saddest, and maddest, thing of all was that Mr Magnitsky is, well, a bit dead – and has been since 2009 when, already a year in custody, he was denied critical medical treatment. This did not seem to be enough to stop the Russian wheels of justice from continuing to grind. Indeed, if it was not all so sad and macabre, the story would be funny.

The courtroom had the standard posse of security guards even though there were no defendants in the dock (Mr Bowder was in London and, in a rare act, Interpol told the Russians to scuttle off when they applied for his arrest. Mr Magnitsy, as I have already pointed out, had other difficulties in being present). After finding Magnitsky guilty, the judge – in an act of great courage in standing up to the rotten State – did not impose a custodial sentence on Mr Magnitsky thereby giving official sanction to his continued resting in peace.

The most brilliant, and incriminating, line came from none other than President Vladimir Pukedin as reported in the New York Times: “I don’t know the details, but I know anyway that Mr. Magnitsky died not from torture — nobody tortured him — but from a heart attack,” . I sympathise Mr Spewtin. Forget the details. It would be unfortunate, after all, for you to be confused by the facts, wouldn’t it? Vlad’s ventriloquist dummy Prime Minister (or whatever title the Impaler ordered him to take this week) Medvedevdevmedved etc, told Bloomberg TV that “He was a corporate lawyer or accountant, and defended the interests of the people who hired him.” Well Mr Medwhateveryoucallit, I think that you will discover that, beyond the walls of the Lubyanka Prison and the ranks of the KGB, that is what lawyers and accountants are supposed to do. And, if I already have your wooden ear – it wouldn’t hurt you to touch up on your facts either. Was he a “corporate lawyer or accountant?”. Maybe tell your aides to lay off the clear liquid for a while and prepare your briefs a little more diligently.

The ongoing tragedy from this circus is that, in retaliation for a US move subsequent to Magnitsky’s death to prevent Russian human rights abusers from traveling to the United States, Mother Russia banned the practice of adoption of Orphans by US families denying them the chance of a decent future. Go figure.

I would like to take this opportunity to thank Tsar Nicholas posthumously ( readers will recall that he ended up being peppered with bullets together with his family) for helping my grandparents with their relocation and ensuring that I grew up in a free society.

Reading “War and Peace” many years ago I learnt that Russian high society used to like speaking French, so “plus ca change, plus c’est la meme chose” – this week there was yet another Russian Show Trial.

Rest in peace

Meanwhile, President Putin is hosting a G20 summit a central feature of which is the war on tax evasion. I rest my case.